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HomeArticlesBroadbandPay TV must adopt or perish Growing popularity of video streaming services is a caution to the legacy service providers
Saturday, 02 February 2019 08:55

Pay TV must adopt or perish Growing popularity of video streaming services is a caution to the legacy service providers

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It takes 1.5 hours for Ram Prakash to commute to his office daily. He would have got bored to death sitting in Metro train doing nothing but staring at other faces. Thank God, it’s smartphone which saved him and millions of jobbers across the world as they are suing that time to refresh themselves with the videos of their choice. This is an age of video-on-demand (VoD) and over- the- top (OTT), being supplied in plenty by leading platforms such as Netflix, Amazon Prime Video, Hotstar and Zee5, all at the cost of television. 

For people like Ram Prakash, choice, privacy and convenience are top factors that keep them away from TV and glued to their smartphones or tablets. Falling data rates, cheap Chinese smartphones, improvement in net speed make smartphone viewing or online streaming an attractive proposition. 

 Even though we are not in South Korea which has 15 times higher net speed than India, we still love streaming services instead of becoming slaves of TV.

Many people, especially youth, have even sold their TV and survive on WiFi-enabled internet connections. With Live TV apps and other apps like Netflix, they can watch all shows on their phones. Even the hardcore TV supporters have no choice but to accept that TVs that are not smart (internet connected with apps), are fast losing popularity.


Falling TV, Rising OTT:

In July 2018, the total number of subscriptions in UK to Netflix, Amazon Prime and Sky’s Now TV – reached 15.4 million in Q1 2018, overtaking, for the first time, the number of pay TV subscriptions, at 15.1 million.

Fall in revenues follows fall in TV viewership, as the UK’s pay TV providers registered a 2.7% decrease in total revenue last year to £6.4bn. In contrast, the increasing number of streaming subscriptions contributed to a 25% growth in online audio-visual revenues, to £2.3bn in 2017. Meanwhile, television advertising income fell by 7%, to £3.9bn.

According to Sharon White, Ofcom’s Chief Executive, “What we watch and how we watch it is changing rapidly, which has profound implications for UK television. We have seen a decline in revenues for pay TV, a fall in spending on new programmes by our public service broadcasters, and the growth of global video streaming giants. These challenges cannot be underestimated.”

Will streaming do what TV did to cinema halls in 1980s & 1990s, or this time, live streaming will kill both – TV  as well as cinema? This is a larger question of survival. 


Streaming is becoming bigger & bigger:

As per , according to Statista report, the number of people around the world using video streaming services is expected to rise over 45% from 283 million in 2018 to 411 million by the end of 2022, making it by far the fastest growing component of the video marketplace. This is mostly being driven by younger generations with subscription-based services proving particularly popular with 18 to 24 year olds.

Recently, the leading player Netflix Inc unveiled a plan to make 17 more original productions in Asia including Thai and Chinese language shows, as the US firm seeks to attract new international users through more local content.

The plan, which includes nine productions in India and five anime series, should help ease concern that the video streaming pioneer is running out of space to expand in developed markets. Netflix has earmarked $8 billion for content this year, and had spent $6.9 billion as at the end of its third quarter.

Ted Sarandos, Netflix’s chief content officer, said: “More than half of Asian content hours viewed on Netflix this year are viewed outside the region. So we have confidence that our upcoming slate of Asian productions will find fans in their home countries and abroad.”

Netflix has 137 million subscribers to its movie and TV streaming service worldwide as of September-end. 


Cheapest rates keep Amazon on top in India:

Amazon Prime Video, which charges the highest rates in the US ($12.99 monthly), is the cheapest in India, available at a monthly membership price of ` 129, according to a study by technology research firm Comparitech Limited. In a list of 28 countries, India has been found the cheapest place to watch Amazon Prime Video.

The study said: “If we compare the overall cost per month of Amazon Prime Video around the world, India is by far the cheapest place to get it. At a cost of just $1.76 (£1.37) per month, it’s $11.23 or £4.62 cheaper than the US or UK, respectively.”

Amazon has 2,351 titles, including movies, shows and documentaries. It is 115% cheaper in India than the average.


Strong local players:

Hotstaris the most subscribed platform in the OTT space in the country; the Star India-owned company’s market share has slid to 30.4 per cent as on October from 36 per cent at the start of the year. 

Aman Kumar, chief business officer at KalaGato said: “OTT demand in India is growing on the back of cheaper data and smartphones, the very concept of prime time is changing — as a result libraries need to be larger and cater to a broader audience than they used to.The market is in a stage where users are spoilt for choice. So, all these indicate that platforms who have bigger libraries and provide quality content will win.”

Regional OTT platforms are offering great content which in turn killing people’s interest in TV in rural areas. Recently, SVF Entertainment’s over the top (OTT) platform hoichoi has entered the top 10 grossing entertainment apps on iOS. 

Can anyone believe that this regional platform is at the eighth position, is rubbing shoulders with Netflix and Hotstar?

Netflix is at the top, followed by Hotstar, ZEE5, ALTBalaji, and Sun NXT. Eros Now is just ahead of hoichoi at the seventh position. SonyLIV is in the ninth position. Colorfy and PixPaint also figure in the top 10.

Subscribers of hoichoi get features like AD free Seamless Viewing Experience with unlimited HD video streaming and Multi-Device Capability. They can view content on Mobiles, PCs, Laptops and Tablets. It is also Chromecast and AirPlay-enabled and available on Apple TV, Amazon Fire TV and will be coming soon on Roku TV. 


Broadcasters, MSOs& DTH operators adopting fast to survive: 

Recently released BCG (Boston Consulting Group) report said that an estimated 16 percent of media consumption in India is already digital. When it comes to the country’s youth, 25 percent consume digital media. The report adds around 81 percent of consumers have up to three video/OTT apps on their smartphones. Also, in less than a year, time spent on video has jumped 11 percent. 

The broadcasters are now launching their own OTT platforms to cash in the boom and remain relevant in this OTT age. They are investing in originals and putting content libraries online.

The OTT players are not just relying on their repository, but also investing big money in producing their own content. The BCG report says that the cost of tent-pole properties built for OTTs is 3-4 times more than the cost of traditional TV content. A Tent-pole production is a big-budget movie whose earnings are expected to compensate the studio for its less profitable movies.

The leading direct to home (DTH) operator Dish TV India has so far invested ` 35 crore on its soon to launch over the top (OTT) platform. It is buying networking equipment.

Dish TV India Group CEO Anil Dua said: “This is our OTT platform. We are not an aggregator. Of course, we may build app-in-app integration but as I said we will provide several live TV channels, we will provide catch-up TV and we will provide some exclusive content.” 


Telcos become aggregators: 

Also, telecom operators are building aggregator models, which is putting content across multiple platforms and providing a payment interface. They are also leveraging access to other OTTs as a differentiating factor to drive consumer retention and acquisition.

As nearly 50 percent of internet users in India will come from rural India by 2020, telecom operators want to leverage their subscribers’ strength, though poor net speed is a major worry with them.

Reliance JioTV is now offering 621 channels on its platform which is much more than what any other Direct-to-Home (DTH) provider or Cable TV service is providing at this point of time.


Diaspora boosting streaming market: 

As per reports, over 50 percent of international viewers pay for Indian content in some form or the other, with 15 percent paying over $20 monthly (` 1,425 approximately) to access Indian content. This has made platforms like ALT Balaji and Zee5 popular platforms abroad. Many regional OTT apps are becoming very popular in diaspora rich regions such as gulf and US. It helps them to remain connected to their culture and traditions.


Smart TV replacing old style TV: 

The coming of smart-TVs or internet-connected TVs as well as high speed internet on mobile phones, tablets and laptops, has relegated the once revered television to the sidelines. With streaming services like Netflix, Amazon Prime and others available on any screen, watching programmes has become a very personal experience. 

Dongles available today can connect the TV to the internet. And hence, the concept of families getting together to watch a movie together doesn't exist anymore.


The way forward:

Digital is future but experts say that broadcasters, MSOs and DTH players need not to fear. They instead should leverage their existing strength to offer competitive services and use latest technologies to retain subscribers. Availability of smart android TV and smart STBs shows that people want to keep their TVs but they need seamless viewing experience across devices.

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